Your vendor management process is a mess. How can you get it under control?

Get a good core team to focus on teh end to end process, starting from customer, business, vendor, finance, procurement etc. vendor management is too critical to ignore as it affects the whole chain and poor results here can create customer DSat. Have implemented process improvement from business side of things for quiet a few cases, and some common threads can be seen

In my experience, vendors need to be clearly classified and organized based on set of services offered. Categorization is based on through risk assessment from security and privacy perspective. A commodity vendor is definitely not the same as an outsourced developer.

One way is to actually spend a few days at your vendor location speaking to the executives and the people who actually work on the account separately . You will learn an awful lot about what is working and what is not. You will also find the gaps at your end ( communication , process , people ) . It is a two way street ( customer to vendor ). The better the partnership, the team work and collaboration , the smoother the support model.

One thing I feel is useful, Leveraging a major vendor during a critical outage is key. Bring their senior leadership to the table, emphasizing the significant business impact and your company's importance as a client. Involving senior leaders from your side amplifies your voice. Clearly communicate the urgency and potential for exploring alternatives if improvements aren't swift. This pressure often leads to escalated efforts from the vendor. Once improvements begin, maintain engagement and express appreciation for their efforts, reinforcing a collaborative relationship.

To regain control of a chaotic vendor management process, start by conducting a thorough assessment to identify specific issues. Establish clear communication channels, set defined vendor criteria, implement standardized procedures, and utilize technology for tracking and monitoring. Regular audits and continuous improvement will help maintain control and efficiency.

Below are some of the steps which can help in defining your objectives and expectations. 1)Strategic vision- aligning your vendors and partners to a single strategic vision. 2) SLA's and KPI's- Include Penalties for non compliance. This will ensure adherence and discipline. Make the KPI's quantifiable and trackable

The objectives and expectations can be shared with the vendors as attachment while configuring a vendor qualification process digitally. Also all the questions under each category of the form ie Company, Financial, Technical, certifications, Capacity and capabilities should be aligned to the above objective and expectations. Platforms like ProcurEngine provide objectivity to the forms with options to configure mandatory questions, proofs etc to make the assessment objective. It is a good idea to share the assessment criterion transparently eg OTIF, FTR, L1 instances, Share of business etc and their weights in the evaluation so that the vendors can direct their resources and energies well. Yearly assessment and outcomes shared yearly

Define specific objectives for the vendor management process. Determine what you aim to achieve, such as cost optimization, risk mitigation, compliance adherence, or improved vendor performance.

The aim is to improve performance, optimize costs, and mitigate risks. Suppliers must ensure compliance, maintain transparent processes, and contribute innovative solutions. Flexibility and adaptability are crucial to adjust to changing market conditions. Building long-term partnerships based on trust and collaboration is essential. Overall, suppliers are expected to actively contribute to optimizing the supply chain and promoting continuous improvement and innovation. This supports the overarching goal of establishing an efficient, robust, and competitive supply chain.

Getting your vendor management process under control requires a systematic approach to enhance efficiency, reduce risks, and build stronger vendor relationships. By implementing few steps, you can bring more structure to your vendor management process, enhance collaboration, and mitigate risks associated with vendor relationships. Regularly reassess and adjust your processes to adapt to changing business conditions and ensure ongoing effectiveness.

There are many e procurement digital platforms like “procurEngine” which provides a comprehensive and effective Supplier Lifecycle Module covering the entire Lifecycle from identification, assessment, qualification, onboarding, dashboard for operations and insights, yearly updation, post PO till payment management, performance assessment, strategic development as ESG certification etc…..

Effectively managing suppliers requires precise tools and systems. Supply Chain Management software and Enterprise Resource Planning systems integrate business processes, while Supplier Relationship Management tools focus on relationship optimization. Electronic Data Interchange improves data exchange, Performance Scorecards monitor performance, and Contract Management tools automate contract processes. Collaborative platforms foster transparent communication, Risk Management tools identify risks, and Data Analytics/AI assist with data analysis and decision-making. The choice of tools depends on individual company requirements, and integrating multiple tools can provide a comprehensive solution for effective supplier management.

Centralized Documentation: Establish a centralized repository for all vendor-related documents, contracts, and agreements. Ensure that the documentation is easily accessible to authorized personnel. Vendor Categorization: Categorize vendors based on their criticality to your business. Prioritize management efforts on key vendors that have a significant impact on your operations.

Managing vendors without the right tools? You're likely missing out. A top-notch Vendor Management Application (VMA) doesn't just centralize data—it transforms your approach to vendor relations. Think beyond spreadsheets: automate contracts, track performance, and scrutinize ROI with precision. It's time to question: Can your current process truly track cost, quality, SLAs, and satisfation effectively? Embrace a VMA and turn vendor management from a chore into a strategic asset. Isn't it time your vendor relationships delivered more value?

Invest in vendors! Trust & communication build a strong "relationship bank" Deposit: reliability, transparency, ethics 🪙 Withdraw: top performance, problem-solving Fix leaks early, keep talking It's a journey, continuously improve Win-win = business success! (737 characters)

It is important to communicate clearly about the job to the vendors. In our experience, we have seen organizations often make mistakes in defining job requirements and establishing pre-qualification criteria while requesting quotes from vendors. Also, it is important to clearly tell vendors about the POC for the job and payment terms as well as any statutory and organization rules that they must adhere to. Vendor education is the key to avoid problems during the execution of the project. Besides, it is important to breakdown the project into tangible steps and follow them using a tool so that transparency can be maintained for all the involved stakeholders.

I've found that maintaining regular communications and developing relationships with vendors throughout the term of the contract helps when the inevitable issues arise. Both buyers and vendors will have developed a basis of mutual trust, enabling collaboration between the parties and eventual issue resolution.

Communication and Relationship Building: Establish open lines of communication with vendors. Foster a collaborative relationship to address issues proactively and build a strong, mutually beneficial partnership. Vendor Onboarding and Offboarding Processes: Develop standardized processes for onboarding new vendors and offboarding those that are no longer needed. Clearly communicate expectations during onboarding and ensure proper transition during offboarding.

1. Stakeholder Identification: Identify key stakeholders who have a vested interest in the vendor management process. 2. Cross-Functional Collaboration: Foster collaboration between these departments to gather input, define requirements, and assess vendor performance. 3. Regular Meetings: Schedule regular meetings or check-ins involving relevant parties. This promotes transparency and keeps everyone informed. 4. Role Clarity: Clearly define the roles and responsibilities of each stakeholder in the vendor management process. 5. Feedback Mechanism: Establish a feedback mechanism. This feedback loop helps identify areas for improvement and address issues proactively. It can be done as part of the agenda of regular meetings.

Designate individuals or teams responsible for overseeing vendor management activities. Clarify roles, responsibilities, and accountability to ensure that tasks are completed efficiently and effectively.

It is important to provide vendors with time to time updates about the change in policies, updating their documents and providing them with a level playing field. Also, vendor training can be included as part of maintaining a strong vendor pool. Financial support and material sourcing support through third parties can unburden the vendors and allows them to focus on the main task, that is executing the project as per the agreed terms & conditions.

Challenging the status quo in vendor management is not just advisable; it's imperative. Continuously reviewing and improving your process is the final, yet ongoing step. Are you truly monitoring performance, quality, and compliance against set objectives, or merely ticking boxes? Periodic audits and reviews should not just verify data but challenge and enhance your understanding of vendor relations. Recognizing and rewarding vendors is crucial, but so is addressing discrepancies with fairness and speed. Seeking feedback is foundational, yet how often is it actioned into meaningful change? Elevate your vendor management from routine to revolutionary. Are you ready for the challenge?

If the Vendor management process is a mess, naturally it means that the entire process is inefficient and not yielding the desired business outcomes. One best way in addition to being clear on goals, objectives, vision etc is to do a complete Value Stream Mapping to determine the most efficient process to manage and also leverage new age technologies like AI powered automation to make it super efficient. For e.g Process Mining to determine the process efficiency, redefining the process based on analysis and Incorporating AI powered automation to make it super efficient and continuously measure business outcomes and process efficiency !

For easy way out, Conduct periodic audits making it ensure the accuracy and integrity of vendor data , invoices. Address issues and gaps promptly and fairly through a well defined resolution process. Encourage vendors to contribute innovative ideas for process management. Investing in skill development initiatives for both internal terms and the vendors to enhance skills and adopt to emerging trends.

To regain control of your vendor management process, it's essential to establish a cycle of continuous improvement. Regularly review and refine your processes to address inefficiencies. Implement a robust monitoring system to measure vendor performance against set criteria. This iterative approach ensures ongoing optimization, enhancing efficiency and fostering a more effective vendor management framework.

Identifying vendors from diversified sources or diversified pool of vendors is important. Existing vendors as well as new vendors should go through a thorough evaluation process or framework. This process can be set by the internal or by a subject matter expert. Also, for critical jobs third party evaluation can be conducted.

As evidenced by recent supply disruptions following the Covid pandemic, robust vendor management necessitates methodologies for risk awareness and mitigation. Implementation steps include: - Assessing the current situation, encompassing standardized commodities, supplier pool analysis, pipeline geolocation, market intelligence, and technological change trends. - Developing a risk model based on organization specific key criteria and applying it across all commodities with a cross-functional team. This may involve factors such as legacy technology, replacement efforts, multi-source availability... - Executing targeted actions to secure the supply of high-risk commodities, which may involve both commercial and technical measures.

In order to streamline a Vendor Manager process, I apply my SGAR Framework: Sourcing, Governance, Assessment and Relationship Building - Sourcing: Identifying, evaluating, and selecting vendors that align with your organization's needs and goals - Governance: Establish and maintaining effective management, control, and policy adherence - Assessment: Regular monitoring, evaluation, and feedback mechanisms to ensure that vendors meet or exceed expectations. - Relationship: This phase focuses on nurturing and strengthening the relationship with the vendor. It emphasizes long-term collaboration, mutual growth, and partnership development, going beyond mere transactional interactions.

To address your vendor management challenges, conduct a comprehensive assessment of your current processes, identifying pain points, and establishing specific goals. Streamline communication by using a centralized platform or system to track interactions and agreements. Develop clear vendor contracts and service level agreements (SLAs) that outline expectations, timelines, and penalties for non-compliance. Regularly review vendor performance through key performance indicators (KPIs) and customer feedback. Implement a vendor scorecard to objectively assess their performance. consider vendor consolidation to simplify your vendor portfolio and strengthen relationships with key partners.

Less vendors is always better than many vendors There is no perfect solution, but a better way to manage expectations We can have unlimited wishes, but there is very little chance we can fulfill them all, prioritize If you believe in something, build a center of excellence of this Nothing right or wrong too 😅